Use This Information to Answer the Following Question The Entry to Set Up the Allowance to Adjust Long-Term

question 39

Multiple Choice

Use this information to answer the following question.These facts concern the long-term stock investments of Webster Corporation: $\begin{array}{ll}\text { June 1, } 2012 & \text { Pand cash for the followng long-term investments: } 5,000 \text { shares Wayne } \\& \text { Corporation common stock (representing } 5 \text { percent of outstanding stock) at } \\& \$ 40 \text { per share; } 3,000 \text { shares Upshur Corporation common stock (representing } \\&\text { percent of outstanding stock) at } \$ 24 \text { per share. } \\\text { Dec. } 31,2012 & \text { Quoted market prices at year end: Wayne common stock, } \$ 35 \text {; Upshur }\\& \begin{array}{l}\text { common stock, } \$ 27 .\end{array} \\\text { April 1, } 2013 & \begin{array}{l}\text { A change in policy required the sale of 1,000 shares of Wayne Corporation } \\\text { common stock at } \$ 38 .\end{array} \\\text { July 1, 2013 } & \begin{array}{l}\text { Received a cash dividend from Upshur Corporation equal to } \$ .30 \text { per share. }\end{array} \\\text { Dec. 31, 2013 } & \begin{array}{l}\text { Quoted market prices at year end: Wayne common stock, } \$ 39 \text {; Ushur } \\\text { common stock } \$ 22 .\end{array}\end{array}$
The entry to set up the Allowance to Adjust Long-Term Investments to Market in 2012 is:

• A) Long-Term Investments 16,000
• Realized Loss 16,000
• B) Realized Loss 16,000
• Long-Term Investments 16,000
• C) Allowance to Adjust Long-Term Investments to Market 16,000
• Long-Term Investments 16,000
• D) Unrealized Loss on Long-Term Investments 16,000
• Allowance to Adjust Long-Term Investments to Market 16,000

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Definitions:

G Factor

Spearman’s term for a general intellectual ability that underlies all mental operations to some degree.

S Factor

Also known as the "specific factor," it refers to specific mental abilities as opposed to general intelligence in psychometric testing.

Primary Mental Abilities

According to Thurstone, seven relatively distinct capabilities that singly or in combination are involved in all intellectual activities.

Charles Spearman

A British psychologist who contributed to the development of factor analysis and the concept of general intelligence, represented as the "g" factor.